Washington, D.C. (PRWEB) January ten, 2013
The Independent Community Bankers of America (ICBA) right now stated it is encouraged that the Customer Economic Protection Bureaus (CFPB) final rule on shoppers capability to repay mortgage loans contains ICBA-advocated accommodations for neighborhood banks. Provisions structuring the qualified mortgage regular as a legal secure harbor and treating specific balloon-payment loans as certified mortgages will help Main Street lenders continue providing mortgage credit to meet the demands of their clients and communities.

ICBA and the nations community bankers have been powerful advocates for tailored guidelines that will address the dilemma actors in the mortgage business although not inhibiting neighborhood banks potential to give mortgages to their clients, ICBA President and CEO Camden R. Fine said. Excessively rigid guidelines would threaten to force neighborhood banks out of the mortgage market place, producing it tougher for Major Street customers to get a home loan and slowing the nations housing recovery. ICBA appreciates CFPBs recognition of neighborhood banks as common-sense, partnership lenders that support their communities thrive.

The CFPBs final rule, which requires effect Jan. ten, 2014, implements laws requiring mortgage lenders to take into account consumers capacity to repay house loans prior to extending them credit. Included in the rule is a definition of qualified mortgage loans, which are entitled to a presumption that the creditor generating the loan happy the capacity-to-repay needs.

Among its provisions, the rule supplies a secure harbor for loans that satisfy the definition of a qualified mortgage and are not deemed to be higher-priced loans, which will support stay away from unnecessary litigation. Further, the rule treats balloon-payment loans as qualified mortgages if they are originated and held in portfolio by small creditors operating predominantly in rural or underserved places.

Importantly, the CFPB is also looking for comment on modifications to the final rule that would extend the protected harbor, qualified mortgage designation to extra loans originated and held in portfolio by community banks with significantly less than $ 2 billion in assets.

ICBA has led the way on these issues, repeatedly encouraging the CFPB to structure the certified mortgage common as a legal protected harbor with clear, effectively-defined standards. ICBA also has worked with the CFPB to consist of community bank mortgage loans held in portfolio below the certified mortgage definition.

The association looks forward to continuing to function with the CFPB to make sure community banker issues with this and other rulemakings are totally addressed.

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The Independent Community Bankers of America